By Natalie Burg
Managing small business day-to-day payment systems is no easy task, especially when you think about implementing a mobile payment system, where you have more choices than just one mobile credit-card reader versus another.
As more small businesses are finding ways to hit the road, whether to trade shows, markets or special events, the ability to accept credit cards anywhere is increasingly handy. And it isn’t just about your mobility as a business, either. The flexibility to accept your customers’ new forms of mobile payment is important, too.
“Consumers and businesses worldwide will make more than $1 trillion in purchases from mobile devices by 2017,” reports Mashable Business, “as the technology enabling mobile payments becomes increasingly common, according to a new report from IDC Financial Insights, a market research firm.”
That’s a pretty convincing number. Before making the leap to mobile payments, however, every business should carefully choose the platform that works best for it — and there are more of them out there than you might imagine.
1. NFC Mobile Wallets
NFC stands for “near field communications.” It’s the kind of technology that can get your techie heart racing.
“For many businesses, the goal is to use NFC to turn smartphones into ‘mobile wallets,’ meaning you would need only your smartphone, not your credit card, to make payments,” writes Stewart Wolpin for Entrepreneur. “One example of NFC is the Chase Blink credit card, which includes an NFC chip and enables users to wave their cards in front of an NFC-enabled point-of-sale terminal instead of having to swipe it.”
One of the benefits of NFC mobile wallets is that the technology can go beyond payments. If your customer shops with NFC technology, says Wolpin, you can also deliver information to her, whether via marketing messages, item locations or even clerk-free shopping.
A disadvantage of this new technology is that it’s not quite mobile for businesses yet. Many new credit-card readers offer the capability of reading NFC, but for now, it’s all about customer mobility.
2. QR Code Payments
More mobile and flexible for both consumers and businesses is QR code payment technology. Once used only for calling up websites and advertisements, QR codes are beginning to have a more consumer-friendly function as a payment system. Mashable describes how the company LevelUp is pioneering the field:
“Consumers download a free app, connect it to their preferred credit or debit card and start buying,” Mashable reports. “Businesses pay no interchange fees and drive new customer engagement through LevelUp’s traditional or co-marketing campaigns. Businesses are charged based on campaign success.”
If the concept sounds great, but too small to jump on yet, just wait. Bank of America is currently testing it out, which could be a big boost for the platform.
“The way it works is that users use their smartphones to scan the QR code, which unlocks the users’ bank information stored in Bank of America’s network to complete the transaction,” writes Marguerite Reardon for CNET News. “The QR codes could be displayed at the register in a store when a customer is checking out, or a restaurant could print the code on the check, allowing patrons to scan their bills right at the table and pay without ever handing over a credit card or cash.”
Or, conceivably, a QR code could be displayed at an off-site location, making it convenient for your business as well as for a mobile customer.
3. Mobile Credit-Card Readers
If you’ve heard of only one mobile-payment platform, this is probably it. The increasingly common system pairs a scanning tool with mobile devices to turn any smartphone or tablet into a credit-card reader. The platform’s simplicity has made it a popular choice.
“Over the past three years, options from Square, VeriFone, PayPal and Intuit offer an immediate solution for the nearly 15 million U.S. businesses that currently don’t accept credit cards,” says Henry Helgeson for Mashable, ”and a solution for businesses that need a secondary, ‘mobile’ payment gateway.”
The drawback of these readers, Helgeson writes, is pretty much the inverse of NFC’s issue. The platform is mobile for businesses, but relies on traditional credit-card use by shoppers.
While customers are still using credit and debit cards for many of their purchases, it’s no surprise that mobile credit-card readers are ahead of the mobile payment platforms pack. But as consumers begin to chose more genuinely mobile options for their payments, the businesses prepared to handle options such as QR codes and and NFC mobile wallets may find themselves with a leg up.
“Payment technology is being developed to help disparate systems work together,” says Helgeson. “Until unified systems are available, the best option small business owners have is to research, compare offerings to their business goals, and then research again.”
Which of the mobile payment platforms would work best for you right now? Knowing your customers and business, which might be the best fit five years down the road?
To keep up with ever-changing trends in the small business world, read Infusionsoft’s latest e-book “The Infusionsoft Guide to Sales and Marketing” for tips on how to amp up your marketing campaigns.